Reliance Power Shares Drop 5% to Rs 39.4, but Soar 90% in a Year

Reliance Power’s stock fell 5%, trading at Rs 39.4, amid a broader decline in the BSE POWER index. Despite this, the stock has surged 90.3% over the past year, outperforming the index’s 69.8% gain. The company posted strong financial results for Q2 FY25, including a significant net profit increase.

CONTENTS:

• Reliance Power posts strong profit growth.
• Reliance Power reports impressive financial turnaround.
• Reliance Power stock drops, but sees significant yearly gains.

Reliance Power Shares Drop 5% to Rs 39.4, but Soar 90% in a Year

Reliance Power posts strong profit growth

Reliance Power Shares Drop 5% to Rs 39.4 Reliance Power reported a consolidated net profit of Rs 2,878.15 crore for the July-September 2024 quarter, a significant turnaround from the net loss of Rs 237.76 crore in the same period last year. The profit surge was driven by a Rs 3,230.42 crore gain from the deconsolidation of a subsidiary and the settlement of guarantor obligations.

However, the company’s total income dropped to Rs 1,962.77 crore, compared to Rs 2,116.37 crore a year earlier. During the quarter, Reliance Power settled Rs 3,872 crore in guarantor obligations for its subsidiary Vidarbha Industries Power Ltd (VIPL), effectively ending its involvement with VIPL, which ceased to be a subsidiary on September 17, 2024.

Additionally, Reliance Power resolved all disputes with CFM Asset Reconstruction Private Limited, with their insolvency application dismissed in late September. As per the regulatory filing, VIPL’s income and expenses were reflected in Reliance Power’s consolidated financials until mid-September. The deconsolidation led to a gain of Rs 3,23,042 lakh, recognized as an exceptional item.

Reliance Power is a key player in India’s private sector power generation, with a diverse portfolio of coal, gas, hydro, and renewable energy projects, totaling 5,300 megawatts of operating capacity.

Reliance Power reports impressive financial turnaround

Reliance Power Shares Drop 5% to Rs 39.4 Reliance Power, led by Anil Ambani, reported a significant turnaround in its Q2 FY25 results, posting a net profit of Rs 2,878.15 crore for the July-September 2024 period, compared to a loss of Rs 237.76 crore in the same quarter the previous year. This impressive profit surge was driven by an exceptional gain of Rs 3,230.42 crore from the deconsolidation of a subsidiary.

The company also reported a rise in its net worth, which stood at Rs 14,393 crore, an increase of Rs 2,779 crore compared to the previous year. Reliance Power’s total income for the quarter was Rs 1,963 crore, with revenue from operations at Rs 1,759.81 crore, down from Rs 2,037.80 crore in the same period last year. EBITDA for the quarter came in at Rs 376 crore.

Notably, Reliance Power has cleared all its bank debt, bringing its debt-to-equity ratio down to 1.02:1, from 1.61:1 in FY24, one of the lowest in the industry. The company’s flagship 3,960 MW Sasan Ultra Mega Power Project in Madhya Pradesh is also one of India’s top-performing plants.

Despite a 7% decline in the stock over the past week, Reliance Power’s shares have risen by 60% in 2024, closing at Rs 38.48 on the BSE. The company currently has a market capitalization of Rs 15,457.30 crore.

Reliance Power stock drops, but sees significant yearly gains

Reliance Power Shares Drop 5% to Rs 39.4 Reliance Power’s stock dropped by 5%, trading at Rs 39.4, as part of a broader decline in the BSE POWER index, which fell by 0.2% to 7,689.1. Other notable decliners in the index included Adani Energy Solutions, down 1.9%, and Indian Energy Exchange, which fell 1.3%. On the positive side, Power Grid Corporation and Thermax saw gains of 0.9% and 0.3%, respectively.

Over the past year, Reliance Power’s stock has risen significantly, from Rs 20.7 to Rs 39.4, marking a 90.3% increase. In contrast, the BSE POWER index has gained 69.8% during the same period. Top performers within the index included Torrent Power (up 125.7%), Siemens (up 111.6%), and BHEL (up 83.4%).

In terms of broader market performance, the BSE Sensex dropped by 0.4%, with Asian Paints seeing a sharp decline of 7.8%, and Axis Bank falling 1.4%. Meanwhile, the NSE Nifty also decreased by 0.4%, with Asian Paints and BPCL among the biggest losers.

For Reliance Power’s financial performance, the company reported a 66.5% year-on-year increase in net profit to Rs 98.3 million for the June 2024 quarter, compared to a loss of Rs 293.7 million in the same period the previous year. However, the company posted a significant 553.9% drop in net profit for the year ended March 2024, with a net loss of Rs 22,422 million. Despite this, revenues grew by 5% to Rs 78,926 million for FY24. The company’s current price-to-earnings ratio stands at -7.7, based on rolling 12-month earnings.